Thank you very much, Mr. Chairman, Senator Lugar, members of the Committee. And I appreciate greatly your action on our nominees. Obviously, that’s a matter of great concern, and I am grateful for your attention.

When I last appeared before this Committee at my confirmation hearing in January, I emphasized the need for a comprehensive approach to the challenges that our nation faces – instability in Afghanistan, Pakistan, Iraq; threats in the Middle East and Iran; transnational threats like terrorism, nuclear proliferation, energy security, climate change; and urgent development needs, from extreme poverty to pandemic disease – all of which have a direct impact on our own security and prosperity.

These are tough challenges, and it would be foolish to minimize the magnitude of the task before us. But we also have new opportunities. By using all the tools of American power – the talent of our people, well-reasoned policies, strategic partnerships, and the strength of our principles – we can make great strides in solving or managing these problems. We have faced some for generations, and now we can also figure out ways to address the new threats of the 21st century.

The President’s 2010 budget is a blueprint for how we intend to put smart power into action. The FY 2010 budget request for the State Department and USAID is $48.6 billion. That’s a 7 percent increase over Fiscal Year ’09 funding. Other accounts that are not directly in the State Department and USAID jurisdiction but are part of our overall foreign policy are also deserving of attention.

We know that this request comes when some agencies are going to be experiencing cutbacks and when the American people are facing a recession. But it is an indication of the critical role the State Department and USAID must play to help advance our nation’s interests, safeguard our security, and make us a positive force for progress worldwide.

Our success depends upon a robust State Department and USAID working side-by-side with a strong military in furtherance of our three Ds – diplomacy, development, and defense – that will enable us to exercise global leadership effectively.

This budget supports the State Department and USAID in three key ways: it allows us to invest in our people, implement sound policies, and strengthen our partnerships.

Let me begin with our people. Many key posts across our embassy world are vacant for the simple reason we don’t have enough personnel. In Beijing, 18 percent of embassy positions are open. In Mumbai, 20 percent. In Jeddah, 29 percent. And we face similar shortages here in Washington. We need good people, and we need enough of them. That’s why the 2010 budget includes $283 million to facilitate the hiring of over 740 new Foreign Service personnel. This is part of the President’s promise of expanding the Foreign Service by 25 percent.

The staffing situation at USAID is even more severe. In 1990, USAID employed nearly 3,500 direct hire personnel to administer an annual assistance budget of $5 billion. Today, the agency's staff has shrunk by roughly a third, but they are now tasked with overseeing $13.2 billion in assistance. To provide the oversight our taxpayers deserve and to stay on target of delivering aid effectively and doubling foreign assistance by 2015, we need more people.

Our people also need the right skills. To help meet the challenge of development, especially in conflict and post-conflict arenas, we’re requesting $323 million for the Civilian Stabilization Initiative. And that includes an expansion of the Civilian Response Corps.

With the right people and the right numbers, the State Department and USAID will be able to focus on our priorities: first, the urgent challenges and regions of concern; second, the transnational challenges; and third, the development assistance.

You know very well that our efforts in Afghanistan and Pakistan center on the President’s goal to disrupt, dismantle, and defeat al-Qaida. It requires a balanced approach, and that is what we are attempting to do by integrating civilian and military efforts. We’re helping the Afghans, for example, to revitalize their country’s agricultural sector. With respect to Pakistan, we’re supporting the Pakistani military as they take on the extremists who threaten their country’s stability. But we’re also making long-term investments in Pakistan’s people and the democratically elected government through targeted humanitarian and economic assistance, and I appreciate the leadership that Chairman Kerry and Senator Lugar are providing on that front.

We are also seeking the resources to deploy a new strategic communication strategy. We can win the war on the ground and literally lose it in the media, and that is what is happening in so many parts of the world today.

As we move forward with the responsible deployment of our combat forces from Iraq, this budget provides the tools we need to help transition to a stable, sovereign, self-reliant Iraq. And we are working with Israel and the Palestinian Authority to advance the goal of a two-state solution.

Now, there are many other hotspots around the world, but suffice it to say, we are attempting to address all of them. And in addition to these urgent challenges, we face a new array of transnational threats, and these require us to develop new tools of diplomatic engagement. We cannot send a special envoy to negotiate with a pandemic, or call a summit with carbon dioxide, or sever relations with the global financial crisis. We have to engage in a different way, and I appreciate Senator Lugar’s commitment to working with us on energy security. And an announcement will be forthcoming soon on a coordinator who will have very significant authorities within the Department, in addition to our Special Envoy on Eurasian Energy, which is already making a difference in terms of encouraging the Europeans and others to begin to work more on their own energy needs.

We’re also working through the Major Economies Forum to prepare for the United Nations Climate Conference in Copenhagen. And we’re working now as a full partner in the P 5+1 talks with respect to new approaches to prevent Iran from obtaining nuclear weapons. And the President and I have launched a six-year Global Health Initiative to combat the spread of disease.

It’s very important to recognize the leadership of this Committee when it comes to nonproliferation, energy, and climate change, and also to know that if we don’t get these right, a lot of what we’re doing in terms of dealing with the day-to-day headlines will not be sufficient.

It’s important that development plays a critical role in our foreign policy, and that’s going to require a new approach. We are taking a stem-to-stern look at USAID and our other foreign aid programs. How are we going to deliver aid more effectively? How are we going to get more of the dollar, the hard-pressed taxpayer dollar that is appropriated for development aid, to actually end up where we expect it to be? And we know that smart development assistance advances our values and our interests. And we look forward to working with you as we attempt to try to recast and revitalize our development efforts.

We also need new partnerships within our own government. Secretary Gates and I testified before the Appropriations Committee a few weeks ago to talk about how we are working with the Defense Department and how, in the process of that effort, the State Department will be taking back authorities and resources to do the work that we should be leading on.

Now, all of this is going to require new partnerships, not only strengthening our multilateral but also our bilateral ties. And our budget request will fulfill the United Nations peacekeeping support that we have committed to. But in addition to our government-to-government work, we are focused on people-to-people diplomacy. We’re working with women’s groups and civil society and human rights activists around the world.

Last week, I announced the creation of a Virtual Student Foreign Service that will bring together college students in the United States and our embassies abroad on digital and citizen diplomacy initiatives. All of this must be premised on sound principals and on sound management. So we’re working to make the Department and USAID more efficient, more transparent and more effective.

Mr. Chairman, we’re pursuing these policies not only because it is the right thing to do, but because we believe it advances America’s security, as well as democracy and opportunity around the world. We actually are the greatest beneficiaries when the world is flourishing. And if not, we bear the cost of the consequences.

As you said, I have traveled many miles since testifying before this Committee. And I can guarantee you that there is an enormous eagerness to partner with us. I look forward to working with this Committee on translating our plans and our words into the kind of action that will ensure a better, more peaceful and prosperous future for our children. Thank you very much, Mr. Chairman.